Director liability under cheque dishonour law requires specific averments; quashing was refused where the complaint disclosed a prima facie case.

A complaint under Sections 138 and 141 of the Negotiable Instruments Act is not liable to be quashed under Section 482 CrPC unless it discloses no sufficient basis to prosecute the director and amounts to an abuse of process. Director liability is not automatic, but the complaint must contain specific averments that the accused was in charge of and responsible for the company's business at the relevant time. Here, the complaint contained such allegations, and the petitioner's reply to notice admitted he was the whole-time director while disputing liability only on the basis that the cheques were collateral security. That defence raised a trial issue, so quashing was not warranted and the petitions were dismissed.

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Issues: Whether the criminal complaints and summoning order under Section 138 read with Section 141 of the Negotiable Instruments Act were liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the ground that the complaint did not contain sufficient averments to fasten liability on the petitioner as a director of the accused company.

Analysis: For invoking inherent jurisdiction, the complaint had to disclose a grave and clear case of abuse of process or a situation where interference was necessary to secure the ends of justice. In prosecutions involving company offences under Section 138 of the Negotiable Instruments Act, liability of a director is not automatic merely because of the designation. The complaint must contain specific averments that the person sought to be prosecuted was, at the relevant time, in charge of and responsible for the conduct of the business of the company. The complaint in the present case contained such allegations against the petitioner. The petitioner's own reply to the statutory notice also admitted that he was the whole-time director of the company and did not dispute issuance of the cheques, while raising only a defence that the cheques were collateral security. That defence raised a matter for trial. In the light of the settled law, the question whether the petitioner was in charge of and responsible for the company's affairs could not be decided in proceedings under Section 482 on the existing material.

Conclusion: The complaints disclosed a prima facie case under Sections 138 and 141 of the Negotiable Instruments Act, and quashing was not warranted. The petitions were not maintainable and were rightly dismissed.

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